Audit Commission head: Council newspapers not misusing public money

The head of the Audit Commission has ruled that local authorities are not wasting or misusing public money through the publication of council-run newspapers.

The watchdog’s chief executive, Steve Bundred, has countered one of the bigger claims made by local newspaper publishers by saying that few councils were in a position to attract local advertising.

‘The money being spent by councils is not unreasonable, though they should always consider whether it provides good value,” Bundred wrote in a letter to the Digital Britain minister, Stephen Timms.

“Few council publications are published sufficiently frequently to be viable media for most local advertising.”

Nor did he believe that councils were using public money to further their political agendas, as many rival editors have claimed, saying the current framework “provides adequate safeguards against misuse of public money for political ends”.

Many in the newspaper industry were looking for the Audit Commission to provide a clear indication that council freesheets were having a negative impact on local commercial newspapers and hoping that such an indication could lead to the brakes being put on council’s producing their own papers.

Sion Simon, the minister for creative industries, told the Commons earlier this month that the Audit Commission report would trigger action in one form or another:

He said: “The next step is to present that information to the Office of Fair Trading, perhaps with Ofcom, and ask them to look for potential competition questions on the impact for the paid-for newspaper market.”

However, the extent of what Ofcom or the OFT could achieve is unclear. The OFT said in November that it had no power to control council-run papers.

The Audit Commission has been conducting a review of the of council spending on communications set in motion by the publication of the Digital Britain white paper last year.

In his letter Bundred said the commission’s remit “does not enable us to assess competition in the local media market or the impact of council activities on commercial entities”.

Bundred’s letter also laid out the findings of the Audit Commission’s research which suggested:

“While 91% of councils published a periodical, only 5% were published more than once a month.

Some 47% contained private sector advertising, while only 6% included recruitment advertising.

The total spending by councils on public communication in 2008-09 was £257m, one third of 1% of overall spend.”